British retail sales unexpectedly rebounded by 1.2% in February from the month before, returning sales volumes to their pre-pandemic level, figures from the Office for National Statistics showed today.

Economists polled by Reuters had forecast that retail sales volumes in February would be 0.2% higher than in January. January sales growth was also revised up to 0.9% from 0.5%.

"In the latest month, discount department stores performed strongly with food shops also doing well as consumers, confronted with cost-of-living pressures, cut back on eating out or purchasing takeaways," ONS statistician Darren Morgan said.

However, today's data showed that retail sales volumes in February were still 3.5% lower than a year earlier.

UK consumers have been squeezed by inflation which hit a 41-year high of 11.1% in October and has remained in double digits since.

The Bank of England said yesterday it expected inflation to fall faster than expected over the coming months, due to lower energy prices and the government's extension of subsidies in last week's budget.

The UK economy looks on track to avoid a recession which was widely forecast at the turn of the year.

A consumer confidence survey today showed sentiment at a one-year high, though still very weak by historic standards.

But even taking these factors into account, government budget forecasters said last week that Britain was still heading for the biggest two-year reduction in living standards since records began in the 1950s.